Regulators, Cabbies, Uber Agree: Illegal Street Hails Have To Stop

by Sean Riley


from 8/18/14

The D.C. Taxicab Commission says it does not have enough hack inspectors to stop “rideshare” drivers from illegally picking up street hails, an issue frustrating metered cabbies who say the emergence of UberX, Lyft, and Sidecar is draining their customer base.

A ride for cash, off the books

Proposed regulations governing the on-demand, app-based car services are on hold until the fall, after the D.C. Council returns from summer recess. In the meantime the “private sedans,” as regulators refer to them, are operating entirely outside the regulatory structure followed by metered taxicabs.

Passengers usually book a ride through the Uber or Lyft app, but in interviews with WAMU 88.5, regulators, cab companies, and ordinary drivers say anecdotal evidence suggests rideshare drivers — including people who merely claim to work for the companies — are plucking customers by pulling up to curbs or waiting outside bars to ask patrons if they want a ride.

Only regular taxis may pick up someone hailing a cab. Uber says it is also opposed to its drivers participating in this black market.

“Our technology platform is used to connect riders and drivers through our lead generation software. Any solicitation independent from the app is strictly prohibited. We communicate this to all driver partners,” said Uber spokesman Taylor Bennett.

Uber collects its 20 percent commission of each fare only when a ride is booked through its smartphone app. So when a driver negotiates a cash fare off the books, Uber has no record of the trip. Moreover, Uber’s insurance policy applies only to rides that are digitally booked, raising liability and public safety issues.

“Uber's insurance policy covers drivers whenever they are on the platform. Anytime they are not logged into the app, their personal insurance comes into effect,” Bennett said.

Auto insurance policies generally include a “livery exclusion” that would deny a liability claim if the owner uses their personal car for profit.

No data, few inspectors

It is believed most rideshare business is booked legitimately through apps and there is no data to accurately determine the number of illegal street hails occurring in Washington. The D.C. Taxicab Commission, which has only five or six inspectors on the streets at any one time, says it has impounded a total of 25 vehicles for “illegal operations” since April.

“We have no way to effectively enforce against it unless we were to mobilize a force of literally hundreds of inspectors and law enforcement officers and just stop all kinds of cars. That is not practical,” said taxicab commission chairman Ron Linton.

The commission has stated that UberX, which is Uber’s rideshare platform, Lyft, and Sidecar are all operating illegally in D.C., a position disputed by the tech companies and others.

But the issue of illegal street hails seems to have a unified opposition, except for the drivers and consumers who participate in them.

“The effective way of enforcing against illegal street hails is to know the legitimate vehicles on the street. So if the rideshare companies — Uber, Lyft, and Sidecar — file an inventory with us and carry the decals we would put on the rear windows, then we don't have to worry about them. We know who they are,” Linton said.

The tech companies have opposed proposals that would require filing updated inventories of drivers and vehicles operating in D.C., citing proprietary business concerns.

“Anything goes”

Regulators are less concerned with the behavior of the tech companies’ enlisted drivers than the potential for anyone with a nice sedan and an eagerness to make a few extra bucks to enter the market.

Barring the tiny chance of getting caught by a hack inspector, there is little deterring anyone from pulling up to a person on the street, claiming they work for Uber, and soliciting a ride for cash. Such drivers are said to be exploiting demand for car services on Friday and Saturday nights in D.C. hot spots like H Street Northeast and U Street Northwest.

“Illegal street hails are really driven by the consumer. The consumers understand these brands. The drivers advertise themselves as such,” said Roy Spooner, the general manager of Yellow Cab Company, based in Northeast D.C. “The consumers have not seen the negative side of this. But should you have a liability situation and you can’t be compensated, then you'd start to see it in a different way.”

Spooner said business is down 30 percent from last summer and he blames illegal street hails for part of the decline. But in his view they are a symptom of the “anything goes” environment encouraged by the lack of insurance regulations and other rules governing “ridesharing” in Washington.

“The public transportation business cannot self-regulate. There must be some transparency. Self-regulation is everybody makes their own rules,” Spooner added.

Cabbies have had enough

Teddy Eyassu had been driving five hours, about half a cabby’s shift, by the time he pulled up to the corner on a downtown Washington street on a recent afternoon.

In those five hours, he had made about $60 — cash and credit. When asked if his slow day could be blamed on summer vacations and the congressional recess, he partly agreed.

“Uber is taking our business and we are not making any money. We are legally allowed by the D.C. government to drive and they are not,” Eyassu said. “It could be because it is August but this is the lowest month I have ever seen. Every time I see a person standing on the corner and I ask if I can pick him up, he says I am waiting for Uber.”

Joseph Tillman, an independent taxi driver for 27 years in Washington, said the current climate is unfair.

“Uber should have to go through the same checks the cab drivers go through. People get in these cars and they don’t know if they are insured or if the driver really works for Uber,” he said, referring to illegal street hails.

DCTC Chairman Linton estimates up to 10 percent of a taxi driver’s shift is now lost to “rideshare” competition, including illegal street hails.